Bitcoin ETFs Lose $434M in Two Days as Bitcoin Touches $60K

TLDR

• Bitcoin ETFs experienced $434 million in outflows on Thursday following $545 million in redemptions the previous day.
• The price of Bitcoin briefly fell to $60,000, marking the lowest point since October 2024.
• Despite Monday’s $561 million in inflows, Bitcoin ETFs have seen a net loss of about $690 million for the week.
• Critics argue that Bitcoin ETFs may undermine the asset’s scarcity, a core feature of Bitcoin’s fixed supply.
• As of Friday, total assets in Bitcoin ETFs reached approximately $81 billion, with cumulative net flows at $54.3 billion.

Bitcoin ETFs saw substantial outflows on Thursday, losing $434 million in a single day. This followed a $545 million redemption on Wednesday, marking a two-day total of nearly $1 billion in outflows. The drop in Bitcoin’s price to nearly $60,000 sparked concerns about the effect of ETFs on the broader market.

Bitcoin ETFs Face $434 Million in Outflows

Bitcoin ETFs suffered significant withdrawals on Thursday, with net outflows totaling $434 million. This came after a $545 million outflow the previous day, resulting in a combined loss of almost $1 billion over two days. Despite Monday’s $561 million in inflows, the outflows have left Bitcoin ETFs with a net loss of approximately $690 million for the week as of Friday morning.

The sharp decline in Bitcoin’s price on Thursday added to the bearish sentiment. Bitcoin briefly fell to $60,000 for the first time since October 2024, according to data from CoinGecko. This price drop has raised questions about the role of Bitcoin ETFs in driving volatility in the market.

Bitcoin’s Price Drop and ETF Concerns

The decline in Bitcoin’s price has led to increased scrutiny of Bitcoin ETFs. Some analysts suggest that these financial products may be contributing to the asset’s volatility. Bob Kendall, a technical analyst, argued that the rise of Bitcoin ETFs has created a “fractional reserve price system,” where the same Bitcoin supports multiple financial instruments.

These concerns echo warnings from other industry experts who have criticized Bitcoin ETFs. Josef Tětek, a Bitcoin analyst at Trezor, cautioned that ETFs could lead to the creation of “millions of unbacked Bitcoin,” potentially lowering the value of actual Bitcoin. While Bitcoin ETFs have contributed to Bitcoin’s institutionalization, some argue this has come at the expense of Bitcoin’s scarcity.

Bitcoin ETFs have grown in size since their launch in January 2024, with total assets reaching around $81 billion. Despite the recent outflows, the cumulative net flows into Bitcoin ETFs remain positive, totaling $54.3 billion. This growth in assets indicates continued institutional interest, even amid concerns over their impact on Bitcoin’s market dynamics.

While Bitcoin ETFs have faced criticism, they remain a significant part of the crypto landscape. As of Friday, Bitcoin ETFs hold over $80 billion in assets, reflecting the ongoing demand for these products.

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